What business leaders continue to miss with crisis preparation

Over the past few months, I've engaged in numerous conversations with friends and clients about my work in crisis management and I've realized it might be interesting to shed light on some persistent areas of misunderstanding. This is going to be several posts but the one I want to tackle first has to do with the most prevalent misconception around crisis planning in general:

First and foremost, I continue to be surprised by how many people think crisis planning only applies to "catastrophic disaster" level events– as in natural disasters, or major financial or litigation scandals. This perspective often sees crisis management as an expensive luxury, suited only for large corporations with significant shareholder interests at stake.

However, my experience and observations reveal a different truth. For the vast majority of businesses, particularly smaller companies and those considered to be in "lower-risk" industries, a crisis can manifest in various forms. What might initially appear as a minor issue can quickly escalate if not managed effectively. And, for many of those smaller businesses, a crisis can also have an outsized impact.

Here's how I usually explain why crisis planning is crucial for businesses at every stage of growth:

Broaden Your Definition of Crisis: A crisis can be any event that threatens the stability of your business or its reputation. This could be a data breach, the sudden loss of a key employee, or even negative social media attention. By understanding that crises can vary in scale and impact, a business can better prepare for the unexpected.

Preparation Minimizes Disruption: Small disruptions can have disproportionately large impacts on business operations, especially for smaller businesses. Crisis preparedness lessens the impact on your operations and bottom line.

Crisis Plans as a Growth Strategy: For emerging businesses, demonstrating robust crisis preparedness can be a competitive advantage, enhancing trust with investors and stakeholders. It shows foresight and maturity, qualities crucial for long-term partnerships and business growth.

Learning Opportunities: Every company should routinely conduct vulnerability audits to identify their weaknesses—this is fundamental. If you do create a create a crisis plan, regularly updating and testing it is crucial. These processes not only reveal your preparedness but also enhance your response capabilities.

Reputation Management in the Digital Age: In the digital realm, where minor issues can quickly spiral in a matter of hours, the speed of your response is crucial. The ability to respond quickly and decisively is paramount.

Confidence and Morale: Knowing that there is a clear plan in place can bolster management confidence and morale.

In the coming posts, I’m going to dive deeper into crisis planning, response, and recovery. Stay tuned as I demystify more aspects of this essential business function.